 "Gavel, law,")
Max Healthcare Institute has moved the Bombay High Court against Touch Healthcare, Quality Care India, and the Evercare Group management for an alleged breach of contract after its (Max’s) offer to acquire Care Hospitals was turned down.
Quality Care and Evercare Group own a majority stake in Care Hospitals, a Hyderabad-based entity.
Evercare is wholly owned by Evercare Health Funds, a $1-billion emerging markets health care fund managed by TPG, an American private equity firm.
In a statement to the stock exchanges, Max said the petition had been filed under Section 9 of the Arbitration and Conciliation Act, 1996, for seeking interim measures of protection and preservation in respect of its contractual rights before the commencement of arbitration.
“The contractual rights arise from the binding obligations of the respondents (in accordance with) the term sheet entered into by the company with Evercare Group Management Limited dated March 16, 2023,” said Max.
Max had made an offer to acquire Care Hospitals, but the hospital chain decided to go ahead with what US-based private equity (PE) firm Blackstone put on the table.
TPG declined to comment but an insider said the company was not involved in litigation.
Max Healthcare declined to comment.
Evercare Health Funds comprises leading investors and global development finance institutions including The Rise Fund, the Bill & Melinda Gates Foundation, the US International Development Finance Corporation (DFC), the International Finance Corporation (IFC), CDC, Proparco, Philips, and Medtronic.
The Indian health care sector is witnessing a frenzy of deal-making. In April, Temasek decided to increase its stake in Manipal Healthcare to 59 per cent at an enterprise valuation of Rs 40,000 crore, giving an exit to the National Investment and Infrastructure Fund and one of TPG’s funds.
In 2022, health care in India emerged attractive for investors with the sector seeing deals worth $4.3 billion at approximately 8 per cent of the total private equity-venture capital investment.
However, in 2022, health care delivered a commanding 16 per cent of the total exit value, at $3.5 billion, according to Bain & company’s annual “India Private Equity Report 2023”.
KKR’s public markets exit from Max Healthcare worth $1.6 billion, Everstone’s from Sahyadri Hospitals, and the initial public offerings of Medanta and Rainbow Hospitals were a few notable events in the space.
